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Bogus GOP "Repeal" Bill Pockets Obamacare's Medicare Savings

January 6, 2016

Republican leaders and their amen corner in the conservative commentariat are ecstatic that both houses of Congress are finally about to send an Obamacare "repeal" bill to the President's desk. This morning, Speaker Paul Ryan tweeted, "The House will vote tomorrow to repeal Obamacare and defund Planned Parenthood." But as Hot Air's Ed Morrissey ("CBO: ObamaCare repeal bill would reduce deficits by half a trillion dollars over 10 years") and the Washington Post's Jennifer Rubin ("The Congressional Budget Office has found that repealing Obamacare is a big money-saver") showed, right-wingers are especially excited that they can now pretend that killing the Affordable Care Act will save Uncle Sam money.
Pretend, that is, because the so-called "Restoring Americans' Healthcare Freedom Reconciliation Act" (H.R. 3762) doesn't "repeal every last word of Obamacare." Instead, the bill simply stops Obamacare's spending which enables roughly 25 million Americans to obtain health insurance. But as they have schemed for years, Republicans plan to pocket most of the $1 trillion-plus in new revenue and savings that more than paid for the ACA's cost. And most of that comes from $879 billion in Medicare savings, the very same savings over which Republicans for the past three elections accused Democrats of "killing Medicare" and "sticking it to seniors."

Now, from the very beginning of the debate over health care reform, the nonpartisan Congressional Budget Office (CBO) has delivered the same two messages to Congressional lawmakers. First, over a 10-year time frame, the Affordable Care Act--aka Obamacare--reduces the national debt. Conversely, the CBO has always found, repealing "every word" of Obamacare will necessarily increase the national debt. The reasons why are no mystery: the new tax revenue generated by Obamacare provisions combined with savings from payments to Medicare providers exceeds all of the outlays for insurance subsidies and the expansion of Medicaid for millions of newly covered Americans.
It was that inconvenient truth which prompted then House Majority Leader Eric Cantor (R-VA) Eric Cantor denounced the agency's supposed "budget gimmickry." Former Speaker and 2012 GOP White House hopeful Newt Gingrich went even further, declaring "if you are serious about real health reform, you must abolish the Congressional Budget Office because it lies."
So when the CBO first scored H.R. 3762 ("Restoring Americans' Healthcare Freedom Reconciliation Act") as reducing deficits by $474 billion between 2016 and 2025, conservative mythmakers were overjoyed. (With the delay of three Obamacare taxes in the just-signed 2016 funding bill, this week's CBO estimate raised that forecast to $516 billion.) In a December article titled, "Obamacare Repeal Would Cut Deficit, Boost Growth - CBO," Investor's Business Daily crowed:

A little-noticed report released Friday afternoon by the Congressional Budget Office shows that the Senate bill to repeal most of ObamaCare would cut the deficit by as much as $474 billion, while boosting GDP, investment and capital stock.
The findings stand in sharp contrast to promises by President Obama and other Democrats that ObamaCare would accelerate economic growth and lower federal deficits.

But in referring to the repeal of "most of ObamaCare," IBD skipped over what Health Affairs rightly called "the $879 billion footnote." As that magic footnote in the legislation drafted by Rep. Fred Upton (R-MI) and Sens. Orrin Hatch (R-UT) and Richard Burr (R-NC) declares:

All provisions of PPACA and HCERA are repealed except for the changes to Medicare." (Emphasis added). [Note: PPACA and HCERA are the two statutory components of the law now known as the ACA -- or Obamacare.] [Emphasis mine.]

That difference, it turns out, makes all the difference. "Saving that single element," HA explained, "turns the CBO's current deficit raising cost projection for repeal from $137 to $353 billion negative to $449 to $665 billion positive."

A critical element of the ACA's financing involves Medicare payment reductions in title 3 of the law to hospitals, insurance companies, home health agencies, and other health care providers (physician payments in Part B were unaffected) to reduce Medicare's rate of spending growth. The resulting savings help to finance the private insurance and Medicaid coverage expansions in ACA titles 1 and 2. In its first 10 years (2011-2020), CBO estimated these title 3 savings at $450 billion; in its recent June estimate, it projects the savings at $879 billion between 2016 and 2025.

That's why if you want to repeal "every single word of Obamacare," as both GOP White House hopeful Ted Cruz and Speaker Paul Ryan said they do, Uncle Sam's deficits will unavoidable get bigger. In June, the same CBO led by the same GOP-handpicked Director Keith Hall said so about a full ACA repeal. As Vox noted six months ago:

Repealing Obamacare would increase the deficit by at least $137 billion or as much as $353 billion, a new Congressional Budget Office report published Friday finds.
The report, requested by Senate Republicans, uses two methods to measure the economic effects of Obamacare -- one that looks at the provisions of the law itself, and one that looks at how the act's effects will ripple through the economy.

But the GOP's partial Obamacare repeal scam is even more sinister than it appears at first blush. After all, every GOP budget since 2010 has kept those same Medicare savings and used them to help fund a massive tax cut windfall for the wealthy. All of those Paul Ryan budgets also called for the voucherization of Medicare, de facto rationing that would dramatically shift health costs to future seniors. Nevertheless, despite their nefarious uses of those same Medicare dollars saved by Obamacare, Republicans in 2010 and again in 2014 successfully ran against Democrats as supposed "Medicare killers," as this ad attests:

"By voting for ObamaCare, Democrats like Mark Pryor, Kay Hagan, Mary Landrieu and Mark Begich cut $717 billion from Medicare -- including $154 billion from Medicare Advantage -- which will hurt seniors."

Back in June, Vox correctly summed up the never-ending Republican Obamacare repeal campaign by simply declaring, "No matter how CBO scores it, Obamacare reduces the deficit." And repealing Obamacare increases Uncle Sam's deficits. Unless, that is, you change what the meaning of "repeal" is. Which is precisely the shell game Republicans are playing now. And just like "death panels" and a "government takeover of health care" (Politifact's Lie of the Year for 2009 and 2010, respectively), the Senate's partial Obamacare repeal is just another of the GOP's killer lies on health care.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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